Trudeau's budget is what happens when you win an election you expected to lose

iPolitics Insights

Contrary to popular belief, great baseball hitters don’t always try for a home run. They generally hit for percentage, not power. But if your team is losing — especially in late innings — you swing for the fences.

Football has its ‘Hail Mary’ play, while in hockey they pull the goalie for the sixth attacker. These are low-probability, high-risk tactics with huge potential payoffs — the sort of things you do when the clock’s running down and you have little to lose.

Which explains much of what was in the 2015 Liberal campaign platform. When the marathon election started last August, the Liberals were deeply mired in third place. The obvious contenders, Stephen Harper and Tom Mulcair, were preaching fiscal discipline and promising balanced budgets, starting immediately.

With defeat an apparent certainty, Justin Trudeau swung for the fences. The economy was sputtering — but not in recession — so he made a very high-risk, unconventional electoral promise. He campaigned on a deficit — a modest one, he said — of about $10 billion in year one of a Liberal mandate, but also in the year after and the two years after that for good measure.

Having no apparent chance of winning liberates a politician. You can promise anything and everything to everybody, secure in the knowledge that you’re not going to have to deliver. New money for stimulus, re-opening Veteran Affairs offices, cash for green initiatives, tax breaks for the middle class and an investment in First Nations. Funding for everyone, to be paid for by future generations — a foolproof plan to stave off political annihilation, assuming you won’t have to deliver on any of it.

But the gamble paid off. Voters, tired of Harper’s management style and having never really connected with Mulcair, chose Trudeau’s sunny ways and the Liberals were swept in with an impressive majority government.

Now what?

With a debt-to-GDP ratio of 31 per cent, we’re not another Greece — nor do we need to fear turning into one. But with a structural deficit and no plan or timeline to get out of it, what we have is increased spending without any fiscal plan.

As it was in 2008 with his bromance pal, Barack Obama, Trudeau’s first challenge in office would be managing expectations. But why disappoint multiple stakeholders, all eager to collect on their political IOUs, when you can simply disappoint those miserly fiscal conservatives who almost certainly didn’t vote Liberal?

So the Liberals opted to double-down, then triple-down. Finance Minister Bill Morneau let slip a week ago that the deficit likely would be closer to $17 billion, without taking into account last October’s expensive election promises. In reality, the deficit will be an eye-popping $29.4 billion for the upcoming fiscal year. Deficits will carry on well into the next mandate of the next Parliament.

The budget adds more than $100 billion to the $650 billion national debt, and we’ll still have a $17.7 billion budget shortfall the next time Canadians go to the polls.

The big winners are EI recipients in energy producing provinces, “unsexy” infrastructure, parents on modest incomes, the elderly poor, municipalities and First Nations.

The biggest losers are taxpayers, small businesses, accountants (as the boutique tax credits are rolled into a single Canada Child Benefit) and future generations, who eventually are going to have to pay off what’s looking now like a structural deficit. Included among the disappointed are both opposition parties — the Conservatives who claim they would spend less, the New Democrats who wish they were in a position to spend more.

The vast majority of new spending is clearly for current consumption, not for stimulus or infrastructure, ending any debate about whether we’re back in a structural deficit.

And this could be just the beginning. Yesterday’s budget defers spending on military shipbuilding and fighter jet procurement. There’s nothing in the budget about a new health accord with the provinces, restoration of home mail delivery or a bailout for that serial recipient of corporate welfare, Bombardier.

With a debt-to-GDP ratio of 31 per cent, we’re not another Greece — nor do we need to fear turning into one. But with a structural deficit and no plan or timeline to get out of it, what we have is increased spending without any fiscal plan. We have only a spending plan, and a generous one at that.

The budget answers many — but not all — Liberal election promises. The biggest promise remains the one that was broken — the promise to return to balance by the end of this mandate. That’s what sports fans call an “unforced error”. Strike one.

Brent Rathgeber was the Conservative MP for the riding of Edmonton—St. Albert from 2008 to 2013, when he resigned from the Conservative caucus to protest the Harper government’s lack of commitment to transparency and open government. He ran and lost in the 2015 federal election to a Conservative candidate. He is the author of Irresponsible Government: The Decline of Parliamentary Democracy in Canada.

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